Mar 26, 2015 (LBO) – Sri Lanka’s Central Bank yesterday signed a 400 million US dollar currency swap agreement with the Reserve Bank of India (RBI), where it would allow the Central Bank to draw funds in US dollar or Euro in multiple tranches, the RBI said in a media release.
The agreement is valid for a period of three years from the date of signing and is expected to further economic co-operation between the two countries, the RBI said.
The facility is available to all South Asian Association for Regional Cooperation (SAARC) member countries that is, to Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
“The swap arrangement is intended to provide a backstop line of funding for the SAARC member countries to meet any balance of payments and liquidity crises till longer term arrangements are made or if there is a need for short-term liquidity due to market turbulence,” RBI said in the statement.
“The arrangement will also further financial stability in the region.”